Stocks, Euro Jump While Oil Posts Best Gain Since 2009

The euro appreciated 1.2 percent after rising by the most since Nov. 30. Photographer: Simon Dawson/Bloomberg

June 29 (Bloomberg) -- Global stocks and the euro surged
the most this year, oil had its biggest gain since 2009 and
Spanish bonds rallied after European leaders reached an
agreement that eased concern banks will fail.

The MSCI All-Country World Index climbed 3 percent, the
most since November, while the Standard & Poor’s 500 Index
advanced 2.5 percent to cap its best June since 1999. The euro
appreciated 1.7 percent against the dollar and rallied as much
as 2 percent, the most since Oct. 27. Spain’s two-year yield
plunged more than a full percentage point. The S&P GSCI gauge of
24 commodities rose 5.6 percent, its biggest gain since April
2009, as oil surged 9.4 percent to $84.96 a barrel.

After talks ended at 4:30 a.m. in Brussels today, leaders
of the 17 euro countries dropped requirements that taxpayers get
preferred creditor status on aid to Spain’s banks and opened the
way to recapitalize lenders directly, while relaxing conditions
on potential help for Italy. Before today, more than $4.9
trillion had been erased from global equities this quarter amid
concern a worsening debt crisis will stifle the global recovery.

“It’s a relief rally,” said Ann Miletti, fund manager for
Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin. Her
firm manages $201 billion. “The agreement at least brings some
clarity and stabilization in the short term. More positive news
out of Europe is all you need in a market that’s been depressed
given all the uncertainty out there.”

The gain in the S&P 500 today was its biggest since Dec. 20
and trimmed its retreat for the quarter to less than 3.3
percent. The index rose 4 percent in June and 2 percent for the
week.

Constellation Rallies

Constellation Brands Inc. rallied 24 percent, the most
since at least 1986, after agreeing to buy the other half of its
Crown Imports joint venture with Grupo Modelo SAB for about
$1.85 billion, becoming the sole U.S. importer of top-selling
Corona beer. Bank of America Corp., Cisco Systems Inc. and
United Technologies Corp. surged more than 4 percent to lead
gains in the Dow Jones Industrial Average, which rallied 277.83
points to 12,880.09.

Research In Motion Ltd. plunged after 19 percent in New
York trading after posting a loss and delaying the next
BlackBerry operating system.

Economic Data

Stocks rallied even as Commerce Department data showed U.S.
consumer spending stalled in May, with household purchases,
which account for about 70 percent of the economy, unchanged
after a 0.1 percent increase the previous month. The median
estimate of 75 economists surveyed by Bloomberg News called for
no change in so-called nominal sales.

The Institute for Supply Management-Chicago Inc.’s business
barometer showed business activity in the U.S. unexpectedly
expanded in June at a faster pace as production and employment
rebounded. The index increased to 52.9, topping the median
estimate of 52.3. The Thomson Reuters/University of Michigan
final index of sentiment fell to 73.2, trailing the median
estimate of 74.1.

The Stoxx 600 advanced the most since November and extended
this month’s rally to 4.8 percent. The gauge still retreated 4.6
percent in the quarter. National Bank of Greece SA, Bank of
Ireland Plc and UniCredit SpA surged at least 13 percent to lead
gains in 45 of 46 lenders in the index.

After markets closed in Europe, Germany’s lower house of
parliament approved the euro-area’s permanent bailout fund, the
European Stability Mechanism. The measure won a two-thirds
majority in the chamber.

Asia, Emerging

The MSCI Asia Pacific Index rose 2 percent, reversing a 0.4
percent drop after the agreement was announced. Stocks fell
earlier as a report showed Japan’s factory output dropped the
most since the March 2011 earthquake last month.

Euro, Dollar

The euro surged 2.2 percent against the yen. Its gain
versus the dollar left it 5.2 percent weaker since the end of
March. The Dollar Index, which tracks the U.S. currency against
those of six trading partners, tumbled 1.4 percent for its
biggest drop since October. The Australian and New Zealand
dollars jumped at least 1.6 percent against the greenback. The
yen weakened against all 16 of its most traded peers.

Volatility on Irish government debt was the highest in
developed markets today followed by Spain and Italy, according
to measures of 10-year bonds, the spread between two-and 10-year
securities and credit-default swaps. Irish bonds rose as Prime
Minister Enda Kenny said the EU accord marked a seismic shift in
policy that may ease the burden on the nation’s taxpayers.

Crude in New York led gains in the S&P GSCI index before an
embargo on Iran starts. The EU agreed to ban the purchase,
transportation, financing and insurance of Iranian oil starting
July l. The sanctions are being imposed because western nations
say Iran is hiding a nuclear weapons program. All 24 commodities
tracked by the S&P GSCI advanced as lead, zinc, silver and
copper rallied more than 4 percent.

The S&P GSCI dropped 13 percent in the second quarter and
oil tumbled 18 percent, the biggest plunge for both since 2008.